Scottish Friendly

Pesto2606

Hi

Can anyone who's a savvy saver advise if this is a product worth going for or not?

http://www.scottishfriendly.co.uk/isas/my-prosperity-isa#overview

I looked at previous threads but they were from 2009 and so might not be relevant anymore and Scottish friendly might of got their act together since then.

Otherwise, is there any long term 5-10 year investment ISA's out there that anyone can recommend?

Thanks

jimjames

Pesto2606 wrote: »

Hi

Otherwise, is there any long term 5-10 year investment ISA's out there that anyone can recommend?

Thanks

An ISA is just a wrapper. You can put almost any fund inside it and any number of those are suitable for long term investment.

Buying something expensive and inflexible isn't the best way to do that though. Even HL is cheap in comparison.

http://www.hl.co.uk/

colsten

It is completely inflexible in terms of what investments you can choose. No entry or exit charges is a complete red herring as they are taking huge charges throughout the life of the ISA. 1.5% AMC is 8-10 times more than people have to pay for some leading funds.

The cashback offerings are just adding insult to injury - guess who is paying for the cashback? As an employee of Scottish Friendly you will know the answer, so please post it for us.

jimjames

It's not the amount that you can invest from that makes it expensive, it's how much you pay in charges in proportion to your investment.

HL also start at £25 so not much difference. WIth them (as one example) you have the choice of over 2000 investment options including ones that have an AMC of 0.07%. That's rather a lot less than 1.5% isn't it?

colsten

This sounds rather unconvincing. Of course people who wish to select their own funds would not go to Scottish Friendly. Scottish Friendly's business model is not to geared towards people who like to be in charge of their own affairs and select their own funds rather than some funds rather than some investments constructed by a provider.

You don't actually disagree, you really do agree that the customers are paying for it. It is nonsense to claimthe cashback represents considerable value. Why are you collecting the cashback via the AMC in the first place, and why would only those customers who find you on cashback sites get some of it back? Nonsense, as I said.

That makes it still some 3 times more expensive than leading funds on several platforms. I do understand why you need to charge so much - and that is one of the reasons why I would never make any investments with your company.

edinburgher

Hi

Can anyone who's a savvy saver advise if this is a product worth going for or not?

http://www.scottishfriendly.co.uk/is...y-isa#overview

Back to the topic (because this thread is fast becoming an advert for SF). As someone *trying* to be a savvy saver, I would avoid this product. As a managed product it is too expensive, as are many managed products.

Like a growing number of private investors, I am unconvinced that the majority of fund managers can reliably deliver market beating/meeting growth and am convinced of the merits of passive investing with a well diversified, balanced portfolio that follows broader market movements as a whole while keeping costs low.

There is a wealth of evidence to suggest that passive investing is a great approach for lots of 'average' investors who want to build a nest egg for the future without requiring skills as a stock picker (or a fund manager picker!)

Monevator is a great start.

I will always be wary of companies selling investments that pop leaflets through the door telling me how great they are Ultimately you are paying for this, the cashback, etc. etc.

dunstonh

Colsten - we have several other investment options but our research shows that some clients want just a single default fund option.

That is probably fair as you are dealing with the bottom end of the market.

Also, your high charges are also fair given the small premiums involved.

If I take the top of the investment ideas on the HL site right now you have charges of 0.75% HL Multi-Manager Income & Growth Trust plus 0.63% from the additional fund expenses.

Not that the fund there is a good option to pick.

jimjames

You seem to misunderstand percentage charges.

Of course 0.5% of £10 is less than 0.5% of £100. But you don't pay any more for the smaller amount with HL, it's the same percentage. And the top end is only actually 0% on all amounts over £2m, so you're already paying £4000 per year in fees on the amount below.

With HL you can pay 0.52% on £25. With your company you are paying 1.5%. Thats nearly 3x as much.

Other companies are much cheaper than HL, that was one I picked as a more expensive option but one that is particularly suited to new investors as their site is very user friendly.

Funnily enough when I looked at the "Detail" section of your website, there was no mention of charges. Is that deliberate?

jimjames

This is why I think it is inflexible

therefore you could get back less in total than you invested if you withdraw or cash in outside of the 10th or subsequent 5th anniversaries of the start date of your policy.

When I invest in funds I want to have the flexibility to get at my money when I want. I don't want the company deciding that I can't get it until 5 years or 10 years. What happens if I need my money after 7 years? With normal funds I don't have "market value reduction".

That's what I call flexibility.

By the way, the charges are currently assumed to be 1.5% but can increase in the future - no guarantees. Normal investment funds are far more transparent than this.

Any expenses will be charged for by a reduction in the bonuses declared in the with-profits fund and this reduction is assumed to be 1.5% of the fund value per
year deducted on a daily basis. We have taken account of all these charges in the figures shown in these examples. They could increase in the future if our costs increase more than expected.

planteria

fair play to nlovatt for coming on to the forum and getting involved.

i am not a member of Scottish Friendly, but am a member of other Friendly Societies, with Tax Exempt Saving Plans and a Regular Savings Plan. i like the Friendly Society plans that pay bonuses on funds not yet invested, in return for committing to invest over a set term (which i don't believe is the case with this ISA). i invest in these alongside my ISA and SIPP: company shares and managed funds which i am in the process of transferring from HL to III.

Archi_Bald

planteria wrote: »

fair play to nlovatt for coming on to the forum

fair play? He is breaking every rule of the forum by using the forum to promote the products and service of the firm he works for.